The federal tax legislation of the United Arab Emirates establishes strict requirements for the maintenance and storage of documentation related to value-added tax (VAT). All companies carrying out VAT-liable transactions in the UAE are required to properly account for such transactions, submit tax returns on time, and ensure appropriate storage of primary and accounting documents.
Compliance with VAT requirements is supervised by the UAE Federal Tax Authority (FTA).
Obligation to maintain records and VAT registration
In accordance with applicable UAE legislation:
- all onshore companies conducting commercial activities in the UAE are required to maintain accounting and tax records;
- companies that reach the mandatory VAT turnover threshold are required to register for VAT;
- all data submitted to the FTA must be accurate, up to date, and supported by documentary evidence.
Mandatory VAT registration applies once annual taxable turnover reaches AED 375,000. If turnover is lower, voluntary registration is possible; however, even then, the company remains obliged to maintain records and store relevant documentation.
Tax Registration Number (TRN)
After successful VAT registration, a company is assigned a Tax Registration Number (TRN). This number must be indicated:
- on all tax invoices;
- in commercial documentation;
- in official correspondence with counterparties and the FTA.
Failure to include the TRN in documents where its inclusion is mandatory is a violation of tax requirements.
Notification of changes to the FTA
VAT-registered companies are required to notify the FTA within 20 days of any changes that may affect their tax status or reporting, including:
- a change of legal address;
- a change in business activity;
- a change in the company’s structure;
- any other information affecting tax accounting.
Failure to comply with this deadline may result in administrative penalties.
VAT documentation retention periods
UAE federal tax legislation establishes minimum retention periods for VAT-related documentation:
- at least 5 years – for most companies and standard transactions;
- at least 15 years – for companies operating in the real estate sector, in accordance with FTA executive regulations.
Documents subject to retention include, among others:
- tax invoices;
- accounting books and records;
- contracts;
- bank statements;
- supporting documents for input and output VAT;
- copies of submitted VAT returns.
Documents may be stored in paper or electronic form, provided they remain accessible and preserved for the entire required retention period.
Tax invoices and primary documentation
A company registered for VAT and making taxable supplies is required to:
- issue original tax invoices in the prescribed format;
- provide such invoices to the purchaser of goods or services;
- retain copies of these documents within its accounting system.
If, for any reason, a tax invoice was not provided to the recipient, it must still be retained in the company’s records and may be requested by the FTA during an audit.
Audits and liability
The FTA has the right to initiate a tax audit at any time, including of companies that are not VAT-registered, if there are grounds to believe they should have been registered.
Failure to maintain proper documentation, breach of retention periods, or incomplete accounting of transactions may result in:
- administrative fines;
- additional VAT assessments;
- suspension or restriction of the company’s tax profile;
- further audits in the future.
Practical conclusion
Proper maintenance and storage of VAT documentation in the UAE is not a formality, but a key element of a company’s tax compliance and risk management. Even where VAT registration is not mandatory, companies must be prepared to substantiate their position with documentary evidence.
If you require:
- VAT accounting setup;
- a review of documentation compliance;
- preparation for an FTA audit;
- ongoing VAT advisory and support in the UAE,
our specialists are ready to provide professional assistance and full support.
